Olympic Steel Reports Fourth-Quarter 2024 Results: Resilience Amid Market Challenges
Olympic Steel, a leading national metals service center, has announced its financial results for the fourth quarter and full year ended December 31, 2024. Despite a challenging metals market with declining demand and pricing, Olympic Steel posted sequential improvements in profitability during Q4. The company’s ability to navigate market conditions successfully and execute on its diversification strategy has contributed to its stable financial performance.
Fourth-Quarter 2024 Financial Performance:
• Net Income: Olympic Steel reported $3.9 million in net income for Q4 2024, or $0.33 per diluted share. This represents a decrease from the net income of $7.4 million or $0.64 per diluted share in Q4 2023.
• LIFO Income: The company recorded $3.1 million in LIFO pre-tax income during the quarter, a decrease from $5.3 million in the same period last year.
• Adjusted EBITDA: The company’s Adjusted EBITDA for Q4 2024 was $14.5 million, marking a sequential improvement over Q3 2024, though it was down from $16.7 million in Q4 2023.
• Sales: Olympic Steel’s sales totaled $419 million in Q4 2024, compared to $489 million in Q4 2023, reflecting the downturn in demand and pricing within the industry.
Full-Year 2024 Financial Performance:
• Net Income: Full-year net income totaled $23.0 million or $1.97 per diluted share, compared with $44.5 million or $3.85 per diluted share in 2023, demonstrating a decrease in profitability.
• LIFO Income: The company reported $5.7 million in LIFO pre-tax income for 2024, a decrease from $8.3 million in 2023.
• Adjusted EBITDA: For the full year, Adjusted EBITDA stood at $72.5 million, down from $97.6 million in 2023, reflecting the tough market conditions throughout the year.
• Sales: Sales for 2024 were $1.9 billion, a decrease from $2.2 billion in 2023, driven primarily by lower steel prices and demand.
Strategic Diversification and Growth:
• Diversification Strategy: Olympic Steel continued to execute its strategy of diversifying its business portfolio. In 2024, the company completed its eighth acquisition in the past seven years, acquiring Metal Works, a prominent manufacturer of metal canopies. This acquisition strengthens Olympic Steel's position in higher-value metal products and validates its strategy of expanding into manufactured products.
• Investments in Automation: The company made strategic capital investments in automation projects aimed at improving throughput, safety, and productivity, supporting both growth and operational efficiency.
• Market Share Growth: Despite challenges in the metals market, Olympic Steel achieved growth in market share across its portfolio and outperformed industry shipment levels. The company maintained shipping volumes within 1% of its 2023 levels, underscoring its ability to perform in a tough environment.
Shareholder Returns:
• Quarterly Dividend: The Board of Directors approved a quarterly dividend increase of 7%, raising the dividend from $0.15 to $0.16 per share. This marks the fourth dividend increase since 2022, reflecting the company’s strong cash flow management and commitment to returning value to shareholders.
• Dividend Payment: The dividend will be payable on March 17, 2025, to shareholders of record as of March 3, 2025. Olympic Steel has paid a regular quarterly dividend since March 2006.
CEO Remarks:
Richard T. Marabito, CEO of Olympic Steel, expressed confidence in the company's future, stating, "We delivered on our strategy to be profitable in all market conditions, successfully growing market share across our portfolio. Despite the challenges faced in the metals industry, we continue to execute on our diversification and growth plans, positioning Olympic Steel for future success."
Marabito further emphasized the company’s focus on organic growth opportunities and its strategy for further acquisitions to enhance high-value product offerings.
Key Takeaways:
• Q4 2024 Net Income: $3.9 million or $0.33 per diluted share, a decline from $7.4 million or $0.64 per diluted share in Q4 2023.
• Q4 Adjusted EBITDA: $14.5 million, a sequential improvement from Q3 2024 but down from $16.7 million in Q4 2023.
• Full-Year Net Income: $23.0 million or $1.97 per diluted share, compared to $44.5 million or $3.85 per diluted share in 2023.
• Full-Year Sales: $1.9 billion, a decrease from $2.2 billion in 2023.
• LIFO Pre-Tax Income: $3.1 million in Q4 2024 and $5.7 million for the full year, both lower than in 2023.
• Acquisitions: Completed the eighth acquisition in seven years, acquiring Metal Works, a metal canopy manufacturer.
• Dividend Increase: Raised quarterly dividend by 7%, from $0.15 to $0.16 per share, marking the fourth increase since 2022.
• Automation Investments: Focused on automation projects to improve throughput, safety, and productivity.
• Market Share Growth: Despite industry challenges, Olympic Steel grew market share and maintained shipping volumes within 1% of 2023 levels.
